If procurement organizations were not feeling surrounded enough by Spend Management software providers hawking their wares, they will now. Given that finance organizations will most likely be the primary target of Banks of Montreal's push to re-sell/private-label Ariba and its own Spend Management solutions, procurement organizations will soon face pressure from all angles to upgrade their procure-to-pay systems and processes. This is not a bad thing, yet I suspect that adding another cook in the Spend Management kitchen might create possible analysis paralysis as more parties come to the table to agree on the menu du jour inside companies.
But back to the subject of the deal announcement. What's my quick take? In short, I suspect that banks will increasingly get into the Spend Management applications world. Just as Chase and American Express entered the downstream payment piece by acquiring Xign and Harbor Payments, respectively, look for other large banks to license solutions from Ariba and others and resell them as their own. In fact, Bank of Montreal is not the first. Citi took the reseller/private-label plunge earlier in the summer. At this stage, I'd argue that most if not all of these financial services companies currently lack the skills, procurement technology and services-know how necessary to resell these capabilities with any degree of expertise and ongoing success. Perhaps we'll see them pick up a smaller integrator or two as well to round out their domain knowledge and commercial know-how in the Spend Management area. As for Bank of Montreal's entrance in the space, look for further commentary on Spend Matters later this week or next.
- Jason Busch